US Stock Market Overview – Stock Rise Led by Energy Shares as Nasdaq and S&P Hit Weekly All-time HighsConsumer spending rose more than expected
US stocks moved higher on Friday to close out the week on an up-note. Both the S&P 500 index and the Nasdaq closed at all-time weekly highs. The Dow Industrial Average has now erased all the losses it experienced during 2020. Stronger than expected consumer spending data in conjunction with solid sentiment helped lift the major average.
The University of Michigan reported that its final index of consumer sentiment was 74.1 this month, up slightly from July’s reading of 72.5. Most sectors in the S&P 500 index were higher driven by gains in energy and consumer discretionary stocks. Healthcare bucked the trend. US yields continued to grind higher while the dollar fell in the wake of the Fed’s new strategy to target inflation. Gold prices moved higher lifting the mining shares. Hurricane Laura was downgraded to a tropical depression as it moved inland after generating widespread devastation across Louisiana.
Consumer Spending Rose
U.S. consumer spending increased by 1.9% last month according to the Commerce Department. The July gain marked the third straight monthly increase in consumer spending, the primary driver of the U.S. economy, but represented a slowdown from the previous two months. Friday’s report from the Commerce Department also showed that income rose 0.4% in July after two months of declines. The personal saving rate was 17.8% in July, down from 19.2% in June and 24.6% in May but well above the 7.6% rate seen in January. Despite the upbeat spending news, jobs could continue to be an issue. On Friday, MGM Resorts International reported it is sending letters to 18,000 U.S. employees who were furloughed during the coronavirus pandemic, making their job cuts permanent.